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Tag Archives: Monarchy

One thing we don’t cover about history, is how bad everything was, and just how recently. The era covered in today’s video (ca. 1710-1711) came AFTER the United Kingdom’s great revolution in governance. The Glorious Revolution of 1688 supposedly set in motion the chain of events that gave us modern parliamentary democracy. This country subjected to the mad whims of a love triangle was one of the freest and best run in the world at the time. After Queen Anne’s death, the British crown was given to a bunch of German protestants, who initially didn’t even speak English, helping constitutional development along. But as recently as 105 years ago, most powerful countries in the world were subjected to personal rule of one degree or another.

Royalty discredited itself by leading us into the disaster that was World War One, and what was true 105 years ago was not true 95 years ago. Kings quickly slipped away, but we really seem to miss them, in defiance of all history and logic. The current discontent with our representative institutions in Europe and the United States leads me to believe that this warping of history is hurting us. We don’t realize just how much worse things were, and just how recently.

Economies are funny things. I just noticed that I forgot to tie today’s video into one of the central messages of this “Markets Are Dumb” series. That’s the importance of Confidence to markets. I sometimes think that’s all there is to them. In our last installment on the Turkish economy I talked about how the fundamentals of the Turkish economy had been disastrous for half a decade. Everybody knew this. All the experts agreed. Yet the Turkish economy kept trucking along, and sometimes putting up very impressive growth numbers. How did it happen? Confidence.

The Turkish people weren’t exposed to the basic facts of their economy, and their misplaced faith, or confidence, kept the wheels spinning. The growth this led to prompted international investors to keep pouring money it. It seems that this perpetual motion machine may finally have stopped. As today’s video makes clear, Trump can’t be held responsible for any of the disastrous choices that Turkish policy makers have made over the past decade. But he is the guy who finally punctured that last bubble of confidence. And that’s actually pretty important.